The US-China trade spate has resulted in the doubling of the premium for Brazilian soybeans in one month, as China may have to replace some 4 million mt of US soybean imports in the fourth quarter with Brazilian origin. An analyst at Rabobank said that the EU, which is the world’s second largest importer of the crop, is likely to shift to the cheaper US origin as a result, after buying mainly from South America for the past few years.
Meanwhile, traders in Brazil are worried that the recently implemented minimum road freight rates will push commodity prices higher. The minimum rates were put into place after a countrywide strike by truck drivers. Cargill has warned that trade houses might have to start buying grains delivered at port, instead of ex-farm or from elevators as is currently the case.
Sources say that Bunge is in talks to sell parts of its sugar trading unit to Wilmar. The talks are apparently focusing on the Asian trading unit, which would give Wilmar better access to Thailand’s exports. In Argentina, meanwhile, Bunge is reportedly going to close down its soybean mill complex at the Ramallo port, according to the mill’s workers’ union. The trade house did not confirm the news, but the union has threatened to strike at some of the other port complexes as a result.
ADM announced it will buy premium vanilla producer Rodelle in Madagascar. The company said that Rodelle was unique in that it had a vertically integrated supply chain which allowed it to supply large scale volumes of certified organic vanilla at lower costs. ADM also said it was keen to secure vanilla supply, especially as a shortage of the product lead to a recent surge in the price of vanilla extract.
Separately, ADM and Vedan have got together to create tapioca starches and tapioca maltodextrin ingredients for manufacturers that are non-GMO and organic. The company said food companies were increasingly looking for plant-based and ‘clean’ ingredients in response to changing consumer demands.
China’s State Development and Investment Corp (SDIC) will become the majority shareholder in Arab Potash Co after it buys an additional 28% stake from Canadian fertilizer supplier Nutrien. This will help China – the world’s main consumer of potash – to guarantee supply.
Staying on the topic of fertilisers, an estimated 58% of the nitrogen applied to crops runs off from farms and emits nitrous oxide, which in turns produces half of the greenhouse gas in the US agriculture sector. However, a recent report suggested that switching everything to organic farming was not the solution. Part of the reason is that all manure – whether organic or synthetic – releases more nitrogen than the plants can absorb. The answer would be to focus on developing more efficient ways to use nitrogen so that we need to use less of it.
Starbucks and McDonald’s have announced a NextGen Cup Challenge through which they have invited ideas to create fully recyclable and compostable cups. The rival companies will contribute USD 5 million to the winners of the challenge to create a prototype, which will then be replicated across their stores. The two companies intend to phase out plastic cups within the next three years.
In Canada, meanwhile, McDonald’s plans to purchase beef from farms and ranches which are Canadian Roundtable for Sustainable Beef (CRSB) certified. The company serves over 20 million Angus burgers every year.
Major meat and dairy producers such as JBS, Fonterra, Dairy Farmers of America, Tyson Foods and Cargill could account for 81% of the world’s emissions by 2050 if they make no changes to their supply chain and continue growing at the same pace. That would be more than emissions from oil producers Exxon, Shell and BP. The findings were published in a report which said it was difficult to find the data to make these assessments because of the lack of reporting. Only 14 out of the 35 companies analysed said they were planning to reduce emissions, but less than a third of those included emissions from the whole supply chain.
Similarly, a Food FW survey found that 53% of the UK companies surveyed did not carry any sustainability information on their websites, and only 7% of the companies in the sector have made investments in sustainability. The report conceded that companies may be hesitant to disclose their sustainability strategies as it could be held against them. However, it added, that mentioning sustainability credentials would benefit the company in the long run.
Finally, in Indonesia, the government has had to intervene as domestic egg prices in June-July rallied to a 2-year high. The price rise was due to the high consumption of instant noodles with eggs during the FIFA football World Cup. A poultry farmers association secretary-general added that the price was also influenced by lower egg supply as farmers sold their hens because the demand for meat was higher.
This summary was prepared by ECRUU
